Monthly compounding

1. (Monthly compounding) How much would you have to invest today at 12% annual interest, compounded monthly, in order to end up with $1,000 in your investment account at the end of 12 months?$887.45$892.86$256.68$990.10

3. (Annualizing a rate) Your bank advertises 12 month CDs with a stated annual interest rate of 12%, compounded monthly. What is the effective annual rate (EAR) on the CD?1%12%12.68%144%

4.(PV of annuity due) You are in charge of a new Missouri State Lottery. The lottery rules say that winners are to be paid $10 million in the form of 10 annual payments of $1 million each. Assuming that the interest rate is 10% and the payments are to be made at the beginning of each of the next 10 years, how much money does your lottery organization have to deposit in an account today in order to make the required payments to a lottery winner?$10,000,000$6,759,024$6,144,567$9,090,909

5.(Rate of return of annuity) If the Bank of America agreed to lend you $50,000 for 10 years in return for 10 annual payments of $7,791 (each payment due at the end of each year), what annual percent rate of interest are you being charged?about 20%about 16%about 9%5.4%

6.(Rate of return of annuity) Joe's Dockyard is financing a new boat with an amortizing loan of $24,000 which is to be repaid in 10 annual installments of $4,247.62 each. What annual interest rate is Joe paying on the loan?18.9%17.7%14.0%12.0%

7.(Loan payments) Tom's Toyotas has a 2004 4 Runner on sale for $16,995. If you could borrow that amount from Tom's Credit Union at 7% for 4 years, what would be your monthly loan payments? $232.30 $378.85 $406.97 $5,017.40

8.(PV of a perpetuity) The PV of an endless stream of annual payments (the payments in the stream continue to be paid forever) of $1,200 each to an investor with a required rate of return of 10% is: $1,000$1,200$12,000$10,000

You are in charge of a new Missouri State Lottery. The lottery rules say that winners are to be paid $10 million in the form of 10 annual payments of $1 million each. Assuming that the interest rate...

You have just borrowed $20,000 to buy a new car. The loan agreement calls for 60 monthly payments of $444.89 each to begin one month from today. If the interest is compounded monthly, then what is the...

Chapter 7
Problem 13 In many financial
transactions, interest is computed and charged more than once a
year. Interest on corporate bonds, for example, is usually payable
every six months. Consider a...

Posted
3 years ago

Recent Questions in Auditing

QUESTION 5 You are the audit senior on the MyPet Pty Limited audit. MyPet is a distributor of pet care products including shampoos, lotions and a small range of toys. MyPet uses an on-line computer system. No goods are manufactured in-house; rather,...
Posted
yesterday

QUESTION 5 You are the audit senior on the MyPet Pty Limited audit. MyPet is a distributor of pet care products including shampoos, lotions and a small range of toys. MyPet uses an on-line computer system. No goods are manufactured in-house; rather,...
Posted
yesterday

INDIVIDUAL ASSESSMENT TASK DUE DATE: 13 SEPTEMBER 2019 (WEEK 7) The individual assessment task weighting/value is 10% The individual assessment must be typed, attached with your completed and signed assignment cover sheet together with the Turnitin...
Posted
3 days ago

Purpose of the assessment (with ULO Mapping) Students are required to: 1.1- Identify and distinguish between tests of controls,substantive tests oftransactions and substantive tests of balances. 1.2- Identify and understand when the auditor will...
Posted
3 days ago

Purpose of the assessment (with ULO Mapping) Students are required to: 1.1- Identify and distinguish between tests of controls,substantive tests oftransactions and substantive tests of balances. 1.2- Identify and understand when the auditor will...
Posted
4 days ago

Purpose: The aim of this group assignment is to provide you with an opportunity to design a “risk-based” audit program for a real world company and focus on the “Substantive tests of balances”, which involves substantiating the ending balance of an...
Posted
4 days ago

Question 2 You are the audit senior with Howard & Associates and have been assigned to the audit of Beautiful Hair Ltd (Beautiful Hair). In early 2019, Beautiful Hair acquired a small manufacturer of high-quality organic hair-styling products....
Posted
7 days ago

Required: Discuss the issues raised over audit quality in the above excerpts. You also need to consider the way in which the *Restructured Code of Ethics may help in providing quality audits that serve public interest....
Posted
10 days ago

What are the auditor independence issues surrounding the provision of external auditing services, internal auditing services, and management consulting services for the same client? Develop arguments for why auditors should be allowed to perform...
Posted
10 days ago

Determine the level of materiality to be used for the audit of the group accounts for the year ending in 2018. Your answer should include a discussion of the nature of materiality, and a description of what materiality represents in terms of the...
Posted
15 days ago